Imports way off as COVID-19 slams into U.S.-China trade
Share Now on:
China may be the only economy in the world returning to “normal,” but it’s import picture still looks pretty bad — down 14% according to new numbers Thursday.
As far as buying American goods, China is way off track in terms of import targets Beijing agreed to in its trade deal with Washington, signed in January. Of course, the pandemic slammed both economies, but already President Donald Trump is threatening to kill the deal and raise more tariffs. The two countries plan to meet on trade issues next week.
Typically, trade deals reduce tariffs and then let capitalism figure out who buys what and how much. But the U.S.-China deal has a target that China buy an average $12 billion in American goods each month.
Right now, the actual imports are less than half that, according to S&P’s Global Market Intelligence. Chris Rogers, a contributor to S&P Global, said China hardly bought anything when the pandemic hit there.
“While the economy was locked down, that of course was going to trim a lot of demand,” Rogers said. “That demand will have picked up in late March, but of course American manufacturing and American farmers and American energy producers aren’t there.”
There to make stuff, or transport it, during our disease peak. Case in point: the meatpacking plants shutting down, as workers got sick from the virus.
U.S. exports of cars to China fell, as did soybeans, which tend to trade in the winter and spring.
“Both sides are having the outbreak in the peak demand season for soybean exports,” said Wendong Zhang, assistant professor of economics at Iowa State University.
To most analysts, the Chinese import target was always a long shot — ambitious, pandemic or no. But Zhang sees one way to get there.
“The only way to do it is to buy some of the products that you would otherwise buy from other countries and now buy from the U.S.,” Zhang said.
That would mean the government butt into markets, which the free-trade deal was designed to avoid. If the agreement goes kaput, as Trump now threatens, he’d put more tariffs on Chinese stuff coming here.
“Putting tariffs on consumer goods and other things we would want people to be buying to help the economy get back on its feet doesn’t seem like the right domestic economic decision,” said Lynn Fischer Fox, a trade lawyer at Arnold & Porter. Not to mention the stock market potentially flipping out.
COVID-19 Economy FAQs
When does the expanded COVID-19 unemployment insurance run out?
The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.
Which states are reopening?
Many states have started to relax the restrictions put in place in order to slow the spread of COVID-19. Although social-distancing measures still hold virtually everywhere in the country, more than half of states have started to phase out stay-at-home orders and phase in business reopenings. Others, like New York, are on slower timelines.
Is it worth applying for a job right now?
It never hurts to look, but as unemployment reaches levels last seen during the Great Depression and most available jobs are in places that carry risks like the supermarket or warehouses, it isn’t a bad idea to sit tight either, if you can.
You can find answers to more questions here.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.
Thanks to our
Your support keeps us going strong, even through